Yield Curves Analysis

Yield curve analysis involves examining the relationship between interest rates and the maturity dates of debt securities, primarily government bonds. The yield curve typically plots yields on the vertical axis against time to maturity on the horizontal axis. A normal upward-sloping curve suggests that longer-term bonds have higher yields, reflecting increased risk over time. An inverted yield curve, where short-term rates exceed long-term ones, may indicate economic uncertainty or recession. Investors and economists use yield curves to assess market expectations for interest rates, inflation, and overall economic health. Understanding this can guide investment decisions and economic forecasts.